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Managing order policies

Even if you have the most advanced production planning system or MRP/CRP, you don't get any advantage from using it if you don't know how to parameterize order policies and order parameters. You will hardly find anything about that in books either. Order policies and parameters are those that define order quantities, frequencies and dates for the materials that a company managesand they must be set by users. The first concept to consider is if a new order of a certain item must be planned depending on actual customer orders or on sales forecast. This decision is related to the difference, if any, between market lead time and cumulative lead time (see Apics for definitions of this). Another thing to consider is if an item is standard or is manufactured following customer specifications. Other aspects to consider are the unit value of the item to be ordered, its annual (or other time bucket) demand value and the predictability of this demand.

Setting ordering policies

Following these consideration we can assign ordering policies to articles as depicted in the following chart


But how rolling out this assignment process in a real company? Maybe you can reckon on your skilled friends of the IT department but it is straightforward doing it with Cowry.